Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and Chief Content Officer of Mansueto Ventures. Each week, this newsletter explores inclusive approaches to leadership, drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it for yourself every Monday morning.
Leaders juggle many demands and priorities. However, most CEOs tell me that they are very attentive to corporate culture, change management and workforce transformation in the age of AI – all areas that their Chief Human Resources Officers (CHROs) or Chief People Officers (CPOs) are also concerned with, notes Jennifer Wilson, co-head of the global Human Resources Officer practice at leadership consultancy Heidrick & Struggles.
“The only other seat besides the CEO that has a company-wide perspective is the Chief Human Resources Officer,” says Wilson. “Today’s best CHROs are weighing in and shaping strategy around big business issues.”
Yet CHROs are rarely asked to take on the role of CEO. Heidrick & Struggles data shows that only 16 CEOs at the 1,000 largest U.S. companies by revenue have prior HR experience.
An overlooked role
Most of these executives worked in HR as part of their climb up the corporate ladder. For example, General Motors CEO Mary Barra spent two years as vice president of Global Human Resources at GM, between her roles as vice president of Global Manufacturing Engineering and a promotion to Senior Vice President of Global Product Development. Joanna Geraghty, CEO of JetBlue Airways, served as the airline’s CPO for four years after serving as associate general counsel and before moving to an executive vice president role overseeing customer experience.
More unusual is the case of Leena Nair, who was CHRO at Unilever when Chanel, the private luxury brand, recruited her as global CEO.
At a time when Chief Financial Officers, Chief Technology Officers and even lawyers are taking on the role of CEO, Tami Rosen, Chief Development Officer and board member at Pagaya, an AI-powered fintech and former CPO at Atlassian, says overlooking HR managers is a miss. “For too long, CHRO and CPO roles have been wrongly portrayed as operational or administrative, when in reality they are the only seats with a true 360-degree view of the business, driving strategy, mission, culture, risk, performance and people,” she says.
The CEO’s support system
Megan Myungwon Lee was CHRO and vice president of business planning and strategic initiatives when she was promoted to chairman and CEO of Panasonic North America in 2021. Lee says Osaka, Japan-based Panasonic has a history of viewing HR, finance and strategy as a three-legged stool supporting the CEO. “In Japan, it’s a $3 million investment if you hire someone because people usually retire from the company,” she notes. “They are not variable costs.”
Lee says her experiences in HR – Panasonic initially hired her as a bilingual secretary – exposed her directly and indirectly to all aspects of the business. It has also shaped her leadership style. “Being a leader is something like that [being] a parent in the sense that you lead with empathy – guiding, setting boundaries and making difficult decisions – while always asking, ‘How would I want someone to treat my own children in this situation?’”
Boards of directors may leave out CHROs in their CEO succession planning for many reasons: Some want their CEO to have customer-facing experience; a technology company may prioritize a leader with a technical background. But Pagaya’s Rosen says boards ignore HR talent at their peril. “More CHROs and CPOs should be elevated to CEO positions because they have the most multi-faceted role in the company, connected to the business, strategy, culture and each team,” she says.
Does your team bring HR professionals to the top?
Does your company have a CPO or CHRO who is a candidate to succeed the CEO? If so, what are the reasons why your company is taking these standards to the next level? I’d like to hear your stories. Send them in an email to stephaniemehta@mansueto.com.
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